The EU Green Claims Directive (GCD) represents one of the most significant attempts to regulate environmental marketing claims in European history. However, its journey from proposal to potential withdrawal has become a fascinating case study in the complex interplay between environmental policy ambitions and practical business concerns.
Background and Origins
The Green Claims Directive emerged from compelling evidence of widespread greenwashing in the European market. A 2020 European Commission study revealed that more than half of environmental claims made by companies were vague, misleading, or unfounded, with 40% being completely unsubstantiated. This proliferation of unreliable green marketing undermined consumer trust and hindered genuine sustainability efforts.
The directive was formally proposed by the European Commission on March 22, 2023, as part of the broader European Green Deal framework. It was designed to complement the Directive on Empowering Consumers for the Green Transition (ECGT), which entered into force in March 2024. Together, these directives were intended to create a comprehensive anti-greenwashing legal framework.
Key Provisions and Requirements
The GCD established several fundamental requirements for environmental claims within business-to-consumer contexts:
Substantiation Requirements
Companies would need to demonstrate that environmental claims are supported by robust scientific evidence based on internationally recognized methodologies. The directive mandated a comprehensive life-cycle perspective, requiring assessment of environmental impacts from production through disposal.
All claims must be specific and transparent, with detailed information about the scope, functional unit, and scientific basis made accessible to consumers through physical means or digital links such as QR codes.
Independent Verification
A cornerstone of the GCD was the requirement for mandatory third-party verification of environmental claims before publication. Independent, accredited verifiers would assess claims against established criteria and issue certificates of conformity recognized across all EU member states.
This pre-approval system represented an unprecedented approach in EU internal market regulation, requiring companies to obtain verification before communicating environmental benefits to consumers.
Comparative and Offsetting Claims
The directive included specific provisions for comparative environmental claims, requiring companies to use equivalent methodologies and representative data when benchmarking against competitors. Claims must demonstrate significant differences that exceed normal data variability while disclosing relevant trade-offs.
Regarding carbon offsetting, the GCD would have required clear separation between actual emission reductions within a company’s value chain and offset credits. Only permanent removals certified under recognized standards could be used for residual emissions after maximum feasible reductions.
Environmental Labels
To address the proliferation of sustainability labels, the directive proposed strict criteria for environmental labelling schemes. New private schemes would require prior approval and must demonstrate added environmental value beyond existing programs. Self-certified labels would be largely prohibited.
Enforcement and Penalties
The GCD included substantial enforcement mechanisms to ensure compliance:
- Fines up to 4% of annual turnover in affected member states for cross-border infringements
- Confiscation of revenues gained from misleading claims
- Temporary exclusion from public procurement processes for up to 12 months
- Mandatory corrective advertising to remove false claims
- Public disclosure of violations
Political Turmoil and Withdrawal
Despite progressing through the standard EU legislative process, the GCD faced mounting opposition throughout 2025. The European Parliament adopted its position in March 2024, and the Council agreed its general approach in June 2024. Trilogue negotiations between the three EU institutions began in January 2025.
However, on June 20, 2025, just days before the scheduled final trilogue meeting, the European Commission announced its intention to withdraw the proposal. This unprecedented move followed intense pressure from the European People’s Party (EPP), the largest group in the European Parliament.
Reasons for Opposition
The EPP and other conservative groups cited several concerns:
- Excessive administrative complexity and bureaucratic burden, particularly for small enterprises
- Lack of proper impact assessment demonstrating that benefits would outweigh costs
- Incompatibility with EU efforts to simplify regulatory compliance
- Pre-approval requirements unprecedented in internal market legislation
The most contentious issue was the inclusion of approximately 30 million microenterprises in the directive’s scope. While the original Commission proposal exempted micro-enterprises (companies with fewer than 10 employees and under €2 million annual turnover), the Council’s position would have extended coverage to these smaller businesses.
Commission’s Position
The Commission later clarified that it would only proceed with withdrawal if microenterprises remained within the directive’s scope. This reflected concerns that applying complex verification requirements to 96% of EU companies would contradict the Commission’s simplification agenda.
Current Status and Future Prospects
As of September 2025, the Green Claims Directive remains in legal limbo. While the Commission announced its intention to withdraw the proposal, it has not been formally withdrawn. The Danish Presidency, which assumed the rotating Council presidency in July 2025, must determine how to proceed with negotiations.
Parliament co-rapporteurs Sandro Gozi and Tiemo Wölken have expressed willingness to continue negotiations if the microenterprise exemption is reinstated. However, political momentum appears to have shifted against the directive amid broader anti-regulatory sentiment in EU politics.
The Existing Legal Framework
Despite headlines suggesting the EU is “abandoning” anti-greenwashing efforts, substantial legal protections remain in place:
ECGT Directive
The Empowering Consumers for the Green Transition Directive entered force in March 2024 and will apply from September 27, 2026. This legislation specifically prohibits:
- Generic environmental claims (like “eco-friendly” or “green”) without demonstrable excellent environmental performance
- Claims about entire products when only specific aspects are sustainable
- Climate neutrality claims based solely on offsetting schemes
- Future environmental performance claims without detailed implementation plans and third-party monitoring
General Consumer Protection
The Unfair Commercial Practices Directive continues to apply, prohibiting misleading environmental claims under general consumer protection principles. National authorities across EU member states actively enforce these provisions through investigations and penalties.
Industry Impact and Business Implications
The GCD withdrawal has significant implications for businesses operating in the EU market:
Immediate Effects
Companies can avoid the substantial compliance costs associated with mandatory third-party verification, which could have been particularly burdensome for smaller businesses. The pre-approval requirement would have potentially delayed product launches and marketing campaigns.
Ongoing Obligations
However, businesses cannot interpret the withdrawal as permission for unconstrained green marketing. Existing legal frameworks still require that environmental claims be:
- Truthful and accurate based on verifiable evidence
- Clear and unambiguous in their meaning and scope
- Substantiated with credible scientific data
- Not misleading through omission of relevant information
Verification Benefits
Despite the absence of mandatory requirements, independent third-party verification remains valuable for building consumer trust and reducing legal risks. Companies seeking competitive advantage in sustainability can voluntarily pursue verification through established schemes like ISO 14021 or sector-specific standards.
Global Context and Comparative Approaches
The GCD’s challenges contrast with developments in other jurisdictions:
United Kingdom
The UK’s Green Claims Code, developed by the Competition and Markets Authority, provides practical guidance based on existing consumer protection law. The CMA has actively investigated sectors like fashion and retail, with enhanced enforcement powers that bypass court proceedings.
Canada
Canada’s Bill C-59 amendments to the Competition Act require “adequate and proper testing” for environmental claims using internationally recognized methodologies. Maximum penalties reach 3% of annual worldwide gross revenues.
Netherlands
The Dutch Authority for Consumers and Markets has established specific Guidelines for Sustainability Claims under existing consumer protection legislation.
Business Strategies and Risk Management
Organizations should adopt comprehensive approaches to environmental claims regardless of the GCD’s status:
Claim Substantiation
Develop robust documentation for all environmental assertions, including life-cycle assessments where appropriate, scientific evidence, and clear methodology descriptions. Establish internal review processes to ensure claims meet legal and ethical standards before publication.
Risk Assessment
Identify high-risk claim categories such as broad sustainability statements, carbon neutrality assertions, and comparative environmental benefits. Prioritize verification efforts in these areas to minimize legal exposure.
Stakeholder Engagement
Prepare for increased scrutiny from consumers, NGOs, competitors, and regulatory authorities. Environmental claims face growing legal challenges through both administrative enforcement and civil litigation.
Proactive Compliance
Consider voluntary verification through established schemes to demonstrate commitment to transparency and build consumer trust. This approach can provide competitive advantages while reducing regulatory risk.
Implications for Environmental Policy
The GCD’s uncertain future reflects broader tensions in EU environmental governance:
Regulatory Fatigue
The withdrawal demonstrates growing resistance to environmental regulation among certain political factions, particularly regarding administrative burdens on businesses. This sentiment may influence future Green Deal initiatives.
Alternative Approaches
The emphasis may shift toward market-driven solutions and voluntary industry standards rather than mandatory regulatory frameworks. This could accelerate the development of private certification schemes and industry self-regulation.
Enforcement Focus
National authorities may intensify enforcement of existing rules rather than awaiting new EU-level legislation. This could lead to divergent approaches across member states, potentially complicating compliance for multinational companies.
Looking Forward
The Green Claims Directive saga illustrates the complex challenges facing environmental regulation in today’s political climate. While the specific framework proposed may not survive, the underlying need for credible environmental claims continues to grow.
Consumer awareness and stakeholder pressure remain powerful drivers for corporate transparency, regardless of regulatory requirements. Companies that proactively address greenwashing concerns through voluntary measures may gain competitive advantages while contributing to genuine sustainability progress.
The EU’s commitment to achieving climate neutrality by 2050 under the European Green Deal ensures that environmental claims will remain under scrutiny. Whether through new legislation, enhanced enforcement of existing rules, or market-driven initiatives, the pressure for authentic environmental communication will persist.
Businesses should view this period not as an opportunity to relax environmental claims standards, but as a chance to demonstrate leadership through voluntary transparency and verification. Those who embrace rigorous substantiation practices today will be better positioned for whatever regulatory framework ultimately emerges.
The story of the Green Claims Directive thus becomes a compelling case study in the evolution of environmental law, highlighting both the ambitions and limitations of regulatory approaches to sustainability challenges in the modern economy.